BOV

The Bank of Montreal has informed Bank of Valletta (BOV) that it will terminate their relationship with Malta at the beginning of December in what a BOV spokesperson described as a “re-dimensioning of its correspondent banking services”.

This is expected to affect “very few” customers, BOV said, as the bank retains a relationship with the Canadian Imperial Bank of Commerce, through which it is still processing payments in Canadian dollars for normal transactions.

“Those customers who transact in particular payments have been advised that the Bank will not be in a position to handle such transactions,” a bank spokesperson confirmed to BusinessNow.mt. “Such customers are very few and have been advised accordingly.”

Such “particular payments” include those which are high risk, and do not fit the Canadian Imperial Bank of Commerce’s risk framework.

The spokesperson noted that “all local and international banks follow rigid payment procedures in order to ensure adherence to each bank’s respective risk appetite framework”.

In an email sent to clients, BOV said that the Bank of Montreal had informed it that it would no longer be offering its banking services.

“Please note that initially the termination date was set as 11th November 2021, which has now been extended to 30th November 2021. This is referring to both CAD and USD accounts,” the bank said.

The spokesperson noted that “all local and international banks follow rigid payment procedures in order to ensure adherence to each bank’s respective risk appetite framework”.

BOV has seen its ability to process payments in foreign currencies suffer over recent years, with only Western Union Business Solutions processing US dollars, after Romania-based Raiffeisen Bank International terminated its relationship in May 2021.

This is widely understood to be part of a de-risking process undertaken by international banks as Malta’s risk profile shot up after being declared non-compliant by Moneyval, the European branch of the global Financial Action Task Force (FATF).

While many breathed a sigh of relief when Malta passed its Moneyval test in May, in recognition of the great efforts by the private and public sectors to beef up compliance, the FATF was not convinced, placing Malta on its “grey list” of jurisdictions subject to enhanced monitoring.

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